A neutral arbitrator's decision is back but a teachers' contract dispute in Palmerton Area School District remains unresolved.

Palmerton's board of directors rejected the arbitrator's recommendation Thursday night by a vote of 7-0.

The neutral arbitrator, Walt De Treux of Philadelphia, said he sided "by the slimmest of margins" with the teachers' union, the Palmerton Area Education Association, because of the absence of retroactivity in the district's last best final offer.

The district offered a 9.71 percent salary increase over four years with no retroactive increase for the 2016-17 school year. Meanwhile, the association proposed a 16.35 percent increase over four years including 3.06 percent for 2016-17.

"The inclusion of retroactivity in the district's last best final offer may have brought it in line with the comparators and would likely have signaled beyond doubt that the district had moved past the prior difficult negotiations and was seeking common ground," De Treux wrote.

"It would have further reinforced this panel's view that the association should restart negotiations with a counteroffer to the district's latest offer. The absence of retroactivity causes the district's last best final offer to fall slightly behind the association when considering the Act 88 criteria."

Board President Barry Scherer said the district is more than willing to sit down with the teachers when it receives a counter offer.

"To this point, we have received one proposal from the association and it has been the same one given to the arbitration panel."

Association President Tom Smelas said the union was disappointed with Thursday night's vote.

"The board had the opportunity to put this to bed," Smelas said. "We reluctantly went to arbitration after close to 12 months of them insisting for us to go. We didn't want to spend the taxpayers money. We believed we could solve these issues amongst ourselves. We reluctantly went and they rejected the decision. We paid a pretty penny and so did the taxpayers of Palmerton."

The existing salary schedule includes a $12,000 jump step between Step 15 and 16.

Both parties attempted to eliminate the jump step by shortening the steps and spreading the large salary increase over several steps.

Director Tammy Recker said she voted to reject the arbitrator's decision because she wants to see teachers get the $12,000 jump step.

"I believe those people who are slated to get the $12,000 bump should get that because they worked here and they deserve it. I believe that should be there and it's not. You don't pull the rug out from under someone like that."

The arbitrator's ruling came back on Sept. 7. The district had 10 days to act on it or it would have automatically become accepted.

Smelas said the teachers overwhelmingly accepted the decision.